Thirty-nine State AGs Urge US Supreme Court to Hear New Jersey Kalshi Case

Attorneys general from 39 states and the District of Columbia are backing New Jersey’s effort to bring its legal fight with Kalshi before the U.S. Supreme Court, arguing that conflicting appeals court rulings have left states’ authority over sports prediction markets unsettled.

The coalition, led by Ohio Attorney General D. Andrew Wilson, filed an amicus brief on Oct. 7 supporting New Jersey’s petition in Flaherty v. KalshiEX, LLC. The filing asks the justices to determine whether federal commodities law overrides state sports gambling regulations.

“They cannot strip the States of their core sovereign power through relabeling and window-dressing,” the attorneys general wrote.

The Supreme Court has not agreed to hear the case. New Jersey filed its petition Sept. 2 after losing an appeal that left Kalshi temporarily protected from state enforcement.

Why New Jersey is challenging Kalshi

Kalshi allows customers to trade contracts tied to event outcomes, including sporting contests. The company introduced sports contracts in January 2025, prompting challenges from regulators who consider the products subject to state gambling laws.

New Jersey’s Division of Gaming Enforcement issued a cease-and-desist letter on March 27, 2025, alleging Kalshi was accepting unauthorized sports wagers, including contracts involving prohibited college competitions. Kalshi sued to block enforcement. The case has wide-ranging implications for prediction market apps.

Kalshi argues its contracts qualify as swaps under the Commodity Exchange Act and therefore fall under the Commodity Futures Trading Commission’s exclusive jurisdiction, preventing states from applying their gambling laws.

The Third Circuit sided with Kalshi in a 2-1 decision April 6, 2026, affirming a preliminary injunction. The majority found the company likely to succeed on its federal preemption argument, although the ruling was not a final decision on the merits.

States warn about consumer protections

The coalition argues that removing state oversight could undermine established gambling protections, including minimum betting ages, self-exclusion programs and measures addressing problem gambling. Its brief also argues that Congress never clearly transferred states’ traditional gambling authority to federal regulators through the 2010 Dodd-Frank reforms.

Pennsylvania Attorney General Dave Sunday, who joined the coalition, said sports prediction contracts should be treated like sports betting.

“It is our position that sports-related prediction markets should be viewed under the law as sports betting,” Sunday said in an Oct. 7 statement.

The dispute also concerns states’ ability to determine their own gambling policies. The coalition contrasts Ohio’s regulated sports betting market with Utah’s gambling prohibition, arguing that federal oversight should not erase those distinctions.

Appeals courts reach different conclusions

The legal uncertainty has grown as federal appeals courts reach conflicting conclusions. On Aug. 28, the Ninth Circuit upheld the dissolution of Kalshi’s preliminary injunction in Nevada, finding that sports contracts did not qualify as swaps under federal law.

The Sixth Circuit reached a similar outcome Sept. 25 in cases involving Ohio and Tennessee. It upheld the denial of preliminary protection in Ohio and vacated an injunction shielding Kalshi from Tennessee regulators.

The Sixth Circuit went further, concluding that even if the contracts qualified as swaps, federal law would not override state gambling regulations. Those decisions conflict with the Third Circuit’s ruling in New Jersey, creating a dispute over both how sports contracts are classified and the extent of federal regulatory authority.

NFL joins call for review

The NFL filed its own supporting brief Oct. 8, arguing that uncertainty over regulatory responsibility threatens consumer protections and sports integrity.

The league warned that gaps between state and federal oversight could expose customers and sporting events to additional risks. It supported the approach taken by the Sixth and Ninth Circuits and urged the Supreme Court to resolve the disagreement.

Gaming regulators, tribal representatives and the American Gaming Association have also submitted briefs supporting Supreme Court review. Kalshi’s response to New Jersey’s petition is due Nov. 9, following an extension granted Sept. 22.

For now, the question is whether the Supreme Court will take the case. The supporting briefs do not change existing court orders or settle whether sports prediction contracts are subject to state gambling laws nationwide.